Corn – Tax changes in BRA sparking light support overnight, 10 day maps still look solid for most areas
↑ BRA is changing the tax subsidies for all Ag products which overnight trade saw as supportive
↔ Details on the changes are limited but it does impact each stage of the Ag production in BRA, so far it is being stressed that this is not an export tax increase but could raise the cost of production
↓ Morning maps still look solid, light to moderate rains and average to slightly below average temps
↓ Open interest is still rising giving signs that fund selling continues, likely at a moderate pace
↑ Ethanol was strong yesterday at 1072K and exports are expected slightly strong today around 1000K
Beans – BRA tax changes would have the largest effect on beans if they have any effect at all
↑ A little better support in beans overnight from the BRA tax headline, if these changes have an effect it should have more impact on beans than corn although it is too early to know what impact this will have
↔ These changes are reductions to tax subsidies for all production factors from seed sales to the farmer, the trucker and the exporter/crusher
↓ It is likely that our day session will still put most attention on the solid weather maps but we will see after 8:30 if this BRA story can cause at least a short term bounce first
↔ Exports are expected moderate today around 350K
Wheat – Putin announced frost may have killed 1% of crop, trade assumed more, US harvest pressure
↓ Yesterday’s Russian wheat headline “MOSCOW, June 5 (Reuters) - Russia will boost financial support to farmers but is not expected to ban grains exports if a federal emergency is declared due to frosts that have damaged crops, industry experts said on Wednesday.”
↓ We still should expect regular harvest pressure, yesterday that pressure took out first chart support
Cattle – First NE cash bid +0.50 at 191, BB stepped back a solid amount, trade remains highly cautious
↔ Yesterday’s PM BB was choice -2.09 Select -3.57 packer BE at 195.48, packer cushion $8.95
↑ First cash bids in NE were +0.50, factoring in normal basis current futures trade is factoring in -$1.50
↔ It makes sense traders are watching BB and seeing a setback yesterday has them cautious about trade going forward but so far the pullback is not drastic, packer profits near $9 yet
↔ There is a chance fund selling in hogs may have partially spilled over to cattle but that is tough to know for sure just yet and we likely won’t know until next Friday’s COT report
↑ Old resistance now being new support may add support for August around 178 (right here)